So we know that when a Daedric artifact is "destroyed" it goes back to it's creators realm and is reformed over time, but what effect does this have on the creators power? Doesn't each artifact represent a portion of that Daedra's power? And if so does the destruction of a Daedric Artifact give them MORE power (since the artifact is now back in their realm) or less power (since it's "destroyed" and one could argue that without the presence of their artifact on Mundus they've lost a way of influencing the events there)

In Blood of The Daedra, Martin implies that the essence of destroyed artifacts returns to the princes.

Daedric presence on Nirn is like a dry erase marker's presence on a white board.

A Daedroth's power can be temporarily separated from the Prince in question, but it doesn't amount to destroying the Daedroth. You can drag power out of a Daedric principality, but the second the form the power has taken is broken, the power just returns to Oblivion.

Also the amount of a Daedroth that exists as an artifact is a spit in the bucket compared to the amount that makes up the Principality which is to say the Prince.

Aedra can be killed just as Nirn can be destroyed. Daedra are constants.

Raok, I think that both possibilities are equally valid (if I am not mistaken, the concurrent feasibility of seemingly contradictory options is a staple of the lore that concerns the Aedra, the Daedra, and the metaphysical underpinnings of Mundus). The increase in the power of a Daedric Lord whose artifact had been destroyed would be nicely balanced out by the fact of said artifact's destruction, since this would equate to the loss of a stable, long-term mechanism for intervening in mortal affairs. So what we have is a case of bolstered strength being traded for a reduction in presence.